6 Simple Steps to Getting a Small Business Loan

6 Simple Steps to Getting a Small Business Loan

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Deciding which small business loan is right for you can be a complicated process. If you're seeking financing for your business, follow these six simple steps.

  1. Make sure you really do need the small business loan.

Why do you need a business loan? Do you need to hire seasonal employees? Do you need working capital to expand the business -- perhaps to open a new location? Answering these questions will help you determine what type of financing makes the most sense for your business.


  1. Decide which type of loan is best for you.

There are numerous kinds of small business loans. Traditional business loans or credit lines can be versatile financing tools for businesses, but can be difficult to qualify for. There are alternatives to choose from if you can't qualify for traditional financing. If your business has a lot of invoices, for example, invoice factoring may be a good option. Retail businesses and restaurants may find merchant capital the best option. Evaluate the options and choose what's best for your business.


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  1. Work out the numbers and make sure you can afford your new loan.

Make sure you know how much you can afford before taking out any type of small business loan. There are many factors to consider. Interest is an important one. The higher your interest rate, the more you'll pay over the life of the loan. On the other hand, you may be able to lower your monthly payment with a longer loan term, but you'll likely still pay a higher interest rate.


  1. Choosing the right lender can make all the difference.

Just like when you’re shopping for any other type of product or service, you never want to choose the first lender you find. Get rate quotes from a few different lenders and compare their rates, fees and loan terms in order to guarantee the best deal. Comparing lenders could save you thousands of dollars.


  1. Gather all necessary documents.

Lenders will want to see a variety of documentation in a loan application. Required documents could include bank statements, sales records, and tax documents. Check with the lender to see what they need, and gather all the documentation necessary before applying.


  1. Apply for the loan that works best for you.

Finally, apply for the loan. Most lenders allow you to apply online, and you can often get approval within a couple days, if not even sooner! Even after you've been approved, read over the fine print. You're not committed to anything until you've signed on the dotted line, so to speak. Do your research so you can obtain the financing your business needs with confidence.


The Bottom Line

If you’re in the market for a small business loan, consider CMS Funding for all your needs. With approvals as fast as a few hours and disbursal as fast as 24 hours, there has never before been a quicker or more convenient way to obtain the capital you need to do business. Click here to receive a free consultation!


Topics: Working Capital Loans, Borrowing Money, Small Business Loan

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